302.02

Co-Tenant Borrowers

Requirements

You must ensure that any Co-Tenant Borrower Co-Tenant BorrowerBorrower consisting of tenants-in-common that own the Property in equal or unequal shares. meets these eligibility requirements:

302.02A

Tenancy-in-Common Agreement

Requirements

You must ensure that a validly executed Tenancy-in-Common Agreement is in place prior to or at the Mortgage Loan Mortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 closing.

You must review the agreement to ensure that:

  • each co-tenant is bound by the terms of the agreement;
  • the Property PropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). has a manager of its day-to-day business and affairs, which can be
    • a single co-tenant (or the Key Principal Key PrincipalPerson who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and/or may be required to provide a Guaranty. of such co-tenant) known as the “co-tenant representative”, or
    • a validly-appointed property manager; and
  • distributions to the co-tenant representative are subordinate to
    • all payments under any Mortgage Loan Mortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 secured by a Lien LienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. on the Property PropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). , and
    • the terms and conditions of any such Mortgage Loan Mortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 .

Guidance

As you analyze the Tenancy-in-Common Agreement, consider the following questions.  The term “co-tenant” also includes any Key Principal Key PrincipalPerson who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and/or may be required to provide a Guaranty. who has the rights of the co-tenant.

Representation

  • Have the Co-Tenant Borrowers Co-Tenant BorrowersBorrower consisting of tenants-in-common that own the Property in equal or unequal shares. given the co-tenant representative the power to deal with the Lender LenderPerson Fannie Mae approved to sell or service Mortgage Loans. through the Tenancy-in-Common Agreement or an irrevocable power-of-attorney?
  • Has each Co-Tenant Borrower Co-Tenant BorrowerBorrower consisting of tenants-in-common that own the Property in equal or unequal shares. waived its right to reside in the Property PropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). ?

Buy outs

  • Does each Co-Tenant Borrower Co-Tenant BorrowerBorrower consisting of tenants-in-common that own the Property in equal or unequal shares. have buy out rights to any other co-tenant?
  • Is each Co-Tenant Borrower Co-Tenant BorrowerBorrower consisting of tenants-in-common that own the Property in equal or unequal shares. financially able to buy out any other co-tenant?

Communication

  • Does each Co-Tenant Borrower Co-Tenant BorrowerBorrower consisting of tenants-in-common that own the Property in equal or unequal shares. have a name, address, telephone number, and percentage of ownership interest listed?
  • Has each Co-Tenant Borrower Co-Tenant BorrowerBorrower consisting of tenants-in-common that own the Property in equal or unequal shares. agreed to promptly notify all other Co-Tenant Borrowers Co-Tenant BorrowersBorrower consisting of tenants-in-common that own the Property in equal or unequal shares. and you if their address or telephone number changes?
  • Has a single Key Principal Key PrincipalPerson who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and/or may be required to provide a Guaranty. of the co-tenant representative agreed to receive any communication from you on behalf of all Co-Tenant Borrowers Co-Tenant BorrowersBorrower consisting of tenants-in-common that own the Property in equal or unequal shares. ?
302.02B

Key Principal Execution of Guaranty

Requirements

You must ensure that:

  • each Co-Tenant Borrower Co-Tenant BorrowerBorrower consisting of tenants-in-common that own the Property in equal or unequal shares. names at least 1 Key Principal Key PrincipalPerson who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and/or may be required to provide a Guaranty. ; and
  • if a Guaranty GuarantyPayment Guaranty, Non-Recourse Guaranty, or other guaranty by a Guarantor for the Mortgage Loan. is required per Part I, Chapter 3: Borrower, Guarantor, Key Principals, and Principals, Section 311: Execution of Non-Recourse Guaranty , a Key Principal Key PrincipalPerson who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and/or may be required to provide a Guaranty. from each Co-Tenant Borrower Co-Tenant BorrowerBorrower consisting of tenants-in-common that own the Property in equal or unequal shares. must become a Guarantor GuarantorKey Principal or other Person executing a Payment Guaranty, Non-Recourse Guaranty, or any other Mortgage Loan guaranty. and execute either a Non-Recourse Guaranty Non-Recourse GuarantyGuaranty executed by a Key Principal on Form 4501 series or Form 6015 series, or approved by Fannie Mae. or Payment Guaranty Payment GuarantyGuaranty executed by a Key Principal on Form 4502 series or Form 6020 series, or approved by Fannie Mae. .